“Let’s say somebody works at a restaurant downtown making minimum salary, $1,900 a month. How do you pay rent? An average bachelor to rent is $899 in our city. So over 50 per cent of their income will be to their rent. This is what we’re dealing with.”

But thanks to one non-profit, Preminger has realized her dream.

“Going through the subway one day, with a very heavy heart, I looked up and saw ‘Options for Homes’ and ‘you can own a home’ because they’re going to help with down payments. And I said, ‘that’s real?’”

A recent subway ad for Options for Homes in Toronto.

Patricia Kozicka, Global News

A year after attending a free info session, Preminger moved into her very own two-bedroom condo.

How it works

Options for Homes is a non-profit that makes it cheaper to buy than rent for people with incomes as low as $20,000. The organization developed its first condominiums in 1994 in what’s now known as Toronto’s Distillery District. Since then, it has helped create homes in its buildings for more than 6,500 households, the majority of which would otherwise not have afforded home ownership.

Second mortgages

Buyers like Preminger who wish to use the organization generally have to put down five per cent and must also qualify for a mortgage. To make the qualification process easier, Options for Homes provides buyers with at least a 13 per cent down payment in the form of a second mortgage, which reduces the mortgage they need to get from the bank.

The second mortgage can be paid back at any point, including at selling time. While there’s no interest on it, if you wait to pay it back, you will also have to factor in the property value increase.

So, if the second mortgage amounted to 13 per cent of the purchase price, you will have to pay 13 per cent of the difference between your purchase and resale price.

“Once the unit gets sold, that money gets reinvested to help other people,” explained Bailão at the grand opening of Cranbrooke Village earlier this month.

The most recent Options for Homes’ project received $1.43 million from the city of Toronto to help with second mortgages.

Ribbon-cutting at the grand opening of Options for Homes Cranbrooke Village development, located at Bathurst and Lawrence; March 20, 2015.

Patricia Kozicka, Global News

Keeping costs low

“Very simply, we take a site, and on that site for instance, a high-end condominium could have produced units that would sell for $450 a square foot,” explained Options’ CEO Mike Labbé. “So quite unaffordable to the group we’re trying to help. So the first thing that happens is we get rid of all the things that make it worth $450. We get rid of the pools and sauna, we get rid of the hype around advertising.”

Labbé added that some developers can spend anywhere from $20,000 to $50,000 per unit on advertising. By limiting itself to mostly subway advertising, free meetings and flyers, Options keeps its marketing costs under $3,000 per unit, which has translated to millions of dollars in savings at its latest 341-unit building.

“So we drop that market value down to $380. We’ve taken and produced more cost-effective housing, period, in the marketplace. Now we’re willing to sell at $380. Because…we only need $320 to build the place…we tell people you have to give us $320 a square foot even though you’re buying it for $380.”

That difference between the cost and purchase price is what the second mortgage amounts to.

Who this helps

Anyone who would not otherwise afford to buy a home can benefit from this program. It’s definitely not just a solution for immigrants.

One new Options homeowner is 36-year-old firefighter Jason Arias, born and raised in Scarborough.

“Affordable housing, some people confuse it with social housing. Two very different things,” he said.

“Yes, I’m a firefighter and I make a good income but I’m also a single father. Buying a home on a single person’s income isn’t as easy as it used to be.”

Jason Arias' new two-bedroom condo, bought for just over $320,000 from Options for Homes.

Patricia Kozicka, Global News

Jason Arias' new two-bedroom condo, bought for just over $320,000 from Options for Homes.

Patricia Kozicka, Global News

Jason Arias' in his new two-bedroom condo, which he bought for just over $320,000 from Options for Homes.

Patricia Kozicka, Global News

The catch

“There’s a couple of catches. One of them is that you have to wait a long time,” Labbé admitted. “The other catch is you’re actually buying into a ‘pay it forward’ idea. So our advertised price is the cost of moving in.

“The catch is you’re going to get help. Once your help is done, you’re going to have to give it to someone else…it’s kind of a nice catch but it does hold some people back.”

As already mentioned, the not-for-profit organization also has a stake of equity in your property.

And, of course, you’re limited location-wise to wherever the organization is able to get the best deal on land, which tends to be outside the downtown core.

The future of affordable housing

When it comes to the Options for Home model, Arias feels it’s one that should be duplicated, while Preminger wishes more people knew about it.

“Like us immigrants, ‘have a pamphlet at the airport. This is one of the options: affordable housing.'”

But could the model work in cities across Canada?

Labbé said he’s presented his affordable home ownership model across Canada. So far, Montreal’s Accès Condos is Options’ most successful spinoff.

The not-for-profit offers buyers a 10 per cent down payment towards the purchase of a condo. All you have to do is qualify for a mortgage.

“If you just have just $1,000 to put as a down payment, it’s enough to buy a with Accès Condos,” said Leslie Molko, a spokesperson for Housing of Montreal.

Model suite at one of the Accès Condos projects.

Accès Condos

Model suite at one of the Accès Condos projects.

Accès Condos

Model suite at one of the Accès Condos projects.

Accès Condos

Model suite at one of the Accès Condos projects.

Accès Condos

Model suite at one of the Accès Condos projects.

Accès Condos

Model suite at one of the Accès Condos projects.

Accès Condos

Model suite at one of the Accès Condos projects.

Accès Condos

Model suite at one of the Accès Condos projects.

Accès Condos

The key to the Montreal organization’s success, according to Labbé, is that it was sponsored by an existing non-profit.

“The issue is the start-up costs. Without a sponsor, it takes an enormous amount of drive and knowledge to pull it off.”

He added that he has no problem with any city or group taking the Options model and making it its own.

“Because it’s not a proprietary idea. It’s an idea that belongs to everybody. So we’re quite happy to see groups come along, and we’re getting very good at saying, ‘No, you haven’t got it yet. Go away and come back when you’ve got it.’”

Regardless of what form it takes, many believe affordable home ownership options are a necessity. Bailão argues that they not only strengthen a city’s economic and social well-being, but also create a sense of pride, which has a trickle-down effect.

“Studies have shown when you have security in your home, especially with home ownership, the kids do better at school, you stay longer at jobs, your health is better. So the benefits are so many,” she said. “That that’s why it’s so important to invest in housing.

“It enables people to live independently and contribute to their community.”